by Calculated Risk on 9/30/2023 08:11:00 AM
Saturday, September 30, 2023
Schedule for Week of October 1, 2023
Special Note on Government Shutdown: If the Republicans shut down the government again, then some economic releases will be delayed. The impacted releases are highlighted in RED.
The key report scheduled for this week is the September employment report on Friday.
Other key indicators include the September ISM Manufacturing and Services indices, September auto sales and the August trade deficit.
10:00 AM: ISM Manufacturing Index for September. The consensus is for a reading of 47.8, up from 47.6 in August.
10:00 AM: Construction Spending for August. The consensus is for a 0.5% increase.
8:00 AM ET: Corelogic House Price index for August.
This graph shows job openings (black line), hires (purple), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.
Jobs openings decreased in July to 8.83 million from 9.17 million in June.
The number of job openings (yellow) were down 22% year-over-year. Quits were down 12% year-over-year.
The consensus is for sales of 15.4 million SAAR, up from 15.0 million SAAR in August (Seasonally Adjusted Annual Rate).
This graph shows light vehicle sales since the BEA started keeping data in 1967. The dashed line is the current sales rate. Note: If there is a shutdown, the BEA will not release vehicle sales, however this will be available from a private source.
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.
8:15 AM: The ADP Employment Report for September. This report is for private payrolls only (no government). The consensus is for 150,000 jobs added, down from 177,000 in August.
10:00 AM: the ISM Services Index for September.
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for 208 thousand initial claims, up from 204 thousand last week.
This graph shows the U.S. trade deficit, with and without petroleum, through the most recent report. The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.
There were 187,000 jobs added in August, and the unemployment rate was at 3.8%.
This graph shows the jobs added per month since January 2021.
Friday, September 29, 2023
Sept 29th COVID Update: Deaths and Hospitalizations Increased
by Calculated Risk on 9/29/2023 07:20:00 PM
Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.
COVID Metrics | ||||
---|---|---|---|---|
Now | Week Ago | Goal | ||
Hospitalized2🚩 | 16,196 | 16,139 | ≤3,0001 | |
Deaths per Week2🚩 | 1,132 | 1,088 | ≤3501 | |
1my goals to stop weekly posts, 2Weekly for Currently Hospitalized, and Deaths 🚩 Increasing number weekly for Hospitalized and Deaths ✅ Goal met. |
This graph shows the weekly (columns) number of deaths reported.
Q3 GDP Tracking: Around 3%
by Calculated Risk on 9/29/2023 03:44:00 PM
From BofA:
Overall, the data flow since our last weekly lowered our 3Q US GDP tracking estimate by a tenth to 2.8%. [Sept 29th estimate]From Goldman:
emphasis added
The foreign trade details of this morning’s report were stronger than our previous assumptions, and we boosted our Q3 GDP tracking estimate by 0.3pp to +3.5% (qoq ar). We left our domestic final sales growth forecast unchanged on a rounded basis at +2.6%. [Sept 29th estimate]And from the Altanta Fed: GDPNow
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2023 is 4.9 percent on September 29, unchanged from September 27 after rounding. After recent releases from the US Bureau of Economic Analysis and US Census Bureau, increases in the model’s nowcasts of the contributions of personal consumption expenditures and net exports to GDP growth were offset by a downward revision in the nowcast of real gross private domestic investment growth. [Sept 29th estimate]
Hotels: Occupancy Rate Decreased 1.6% Year-over-year
by Calculated Risk on 9/29/2023 02:52:00 PM
U.S. hotel performance increased from the previous week, according to CoStar’s latest data through 23 September.The following graph shows the seasonal pattern for the hotel occupancy rate using the four-week average.
17-23 September 2023 (percentage change from comparable week in 2022):
• Occupancy: 68.5% (-1.6%)
• Average daily rate (ADR): US$164.97 (+2.9%)
• Revenue per available room (RevPAR): US$112.96 (+1.2%)
emphasis added
The red line is for 2023, black is 2020, blue is the median, and dashed light blue is for 2022. Dashed purple is for 2018, the record year for hotel occupancy.
Fannie and Freddie: Single-Family Mortgage Delinquency Rate Declined, Multi-Family Increased in August
by Calculated Risk on 9/29/2023 10:57:00 AM
Today, in the Calculated Risk Real Estate Newsletter: Fannie and Freddie: Single-Family Mortgage Delinquency Rate Declined, Multi-Family Increased in August
Brief excerpt:
I’ve argued that there would not be a huge wave of single-family foreclosures this cycle since lending standards have been solid and most homeowners have substantial equity. That means we will not see cascading price declines like following the housing bubble. Delinquencies are a trailing indicator but are something to watch.You can subscribe at https://calculatedrisk.substack.com/.
However, there is some concern about some multi-family properties.
...
Freddie Mac reports that multi-family delinquencies increased to 0.25% in August, up from 0.12% in August 2022.
This graph shows the Freddie multi-family serious delinquency rate since 2012. Delinquency rates were still high in 2012 following the housing bust and financial crisis.
The multi-family delinquency rate increased following the pandemic and has increased recently as rent growth has stalled, vacancy rates have increased, lending has tightened, and interest rates have increased sharply. This will be something to watch as rents soften.
PCE Measure of Shelter Slows to 7.4% YoY in August
by Calculated Risk on 9/29/2023 09:12:00 AM
Here is a graph of the year-over-year change in shelter from the CPI report and housing from the PCE report this morning, both through July 2023.
CPI Shelter was up 7.2% year-over-year in August, down from 7.7% in July, and down from the cycle peak of 8.2% in March 2023.
Since asking rents are slightly negative year-over-year, these measures will continue to slow sharply over coming months.
Personal Income increased 0.4% in August; Spending increased 0.4%
by Calculated Risk on 9/29/2023 08:30:00 AM
The BEA released the Personal Income and Outlays report for August:
Personal income increased $87.6 billion (0.4 percent at a monthly rate) in August, according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI), personal income less personal current taxes, increased $46.6 billion (0.2 percent) and personal consumption expenditures (PCE) increased $83.6 billion (0.4 percent).The August PCE price index increased 3.5 percent year-over-year (YoY), up from 3.4 percent YoY in July, and down from the recent peak of 7.1 percent in June 2022.
The PCE price index increased 0.4 percent. Excluding food and energy, the PCE price index increased 0.1 percent. Real DPI decreased 0.2 percent in August and real PCE increased 0.1 percent; goods decreased 0.2 percent and services increased 0.2 percent.
emphasis added
The following graph shows real Personal Consumption Expenditures (PCE) through August 2023 (2012 dollars). Note that the y-axis doesn't start at zero to better show the change.
The dashed red lines are the quarterly levels for real PCE.
Personal income was slightly below expectations, and PCE was at expectations.
Using the two-month method to estimate Q3 real PCE growth, real PCE was increasing at a 4.0% annual rate in Q3 2023. (Using the mid-month method, real PCE was increasing at 3.9%). This suggests strong PCE growth in Q3.
Thursday, September 28, 2023
Friday: Personal Income and Outlays
by Calculated Risk on 9/28/2023 07:53:00 PM
Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.
Friday:
• At 8:30 AM ET, Personal Income and Outlays, August 2023. The consensus is for a 0.5% increase in personal income, and for a 0.4% increase in personal spending. And for the Core PCE price index to increase 0.2%. PCE prices are expected to be up 3.5% YoY, and core PCE prices up 3.9% YoY.
• At 9:45 AM, Chicago Purchasing Managers Index for September. The consensus is for a reading of 47.6, down from 48.7 in August.
• At 10:00 AM, University of Michigan's Consumer sentiment index (Final for September). The consensus is for a reading of 67.7.
Asking Rents Down 1.2% Year-over-year
by Calculated Risk on 9/28/2023 02:45:00 PM
Today, in the Calculated Risk Real Estate Newsletter: Asking Rents Down 1.2% Year-over-year
A brief excerpt:
Tracking rents is important for understanding the dynamics of the housing market. For example, the sharp increase in rents helped me deduce that there was a surge in household formation in 2021 (See from September 2021: Household Formation Drives Housing Demand).There is much more in the article. You can subscribe at https://calculatedrisk.substack.com/
The surge in household formation has been confirmed (mostly due to work-from-home), and this led to the supposition that household formation would slow sharply in 2023 (mostly confirmed) and that asking rents might decrease in 2023 on a year-over-year basis (now negative year-over-year).
Recent data suggests household formation has slowed sharply and asking rents are declining year-over-year.
...
Here is a graph of the year-over-year (YoY) change for these measures since January 2015. Most of these measures are through August 2023, except CoreLogic is through July and Apartment List is through September 2023.
...
With slow household formation, more supply coming on the market and a rising vacancy rate, rents will be under pressure all year. See: Forecast: Multifamily Starts will Decline Sharply
Realtor.com Reports Weekly Active Inventory Down 3.7% YoY; New Listings Down 7.5% YoY
by Calculated Risk on 9/28/2023 01:00:00 PM
Realtor.com has monthly and weekly data on the existing home market. Here is their weekly report from Jiayi Xu: Weekly Housing Trends View — Data Week Ending Sep 23, 2023
• Active inventory declined, with for-sale homes lagging behind year ago levels by 3.7%. During the past week, we observed the 14th successive drop in the number of homes available for sale when compared to the previous year. This decline showed a slight improvement compared to the previous week’s -4.4% figure.
• New listings–a measure of sellers putting homes up for sale–were down again this week, by 7.5% from one year ago. Over the past 64 weeks, we’ve consistently seen a decline in the number of newly listed homes compared to the same period one year ago. While this gap in new listings was gradually narrowed over the past few weeks, in the most recent week, the decrease in newly listed homes was -7.5% compared to the previous year, lower from the -6.0% decline in the week prior.
Inventory was down 3.7% year-over-year - this was the fourteenth consecutive week with a YoY decrease following 58 consecutive weeks with a YoY increase in inventory.